Column : Understand lobbying to regulate it

SummaryPolitical lobbying has been the subject of intense controversy in our country ever since the leaked Radia tapes first hit the headlines.

Political lobbying has been the subject of intense controversy in our country ever since the leaked Radia tapes first hit the headlines. The prevalence of lobbying is clearly not restricted to India: WikiLeaks alleges that there has been significant lobbying by parties as diverse as BHP Billiton (attempting to block the acquisition of rival Rio Tinto by Chinalco), the US government (encouraging the EU to allow GM vegetables), and the Vatican (encouraging nations to sign climate change accords).

Our government is now mulling the introduction of a legal framework to govern lobbying, which has heretofore been largely unregulated, except when it crosses the line into outright corruption. Most would agree that some form of lobbying serves a useful function, since government would find itself hard-pressed to accumulate all relevant information about complex legislative topics. Decisions taken without the benefit of such information would risk endangering the interests of one or other group of stakeholders without the ability for these groups to influence the decision-making process. So, banning lobbying outright doesn’t seem feasible.

In the US, the practice is widely prevalent, with over 12,000 lobbyists spending over $2 billion in 2010 to influence policy outcomes. Of course the US is not precisely the right comparison for a parliamentary democracy with a whip system such as India (in the US, there is no hard ‘party line’ that Congressmen need to toe, unlike in India). The UK may be a more reasonable comparison, given that a whip system operates there as well. Again, the UK spends significant resources on political lobbying activities—the Chartered Institute for Public Relations estimates that (in the corporate sector) some 14,000 people are engaged in public affairs activities, with a capitalised value of over £2 billion. This figure doesn’t include the large commitment of NGOs and charities to lobbying activities.

Despite the large size of lobbying activities in both countries, contrary to popular belief, well-established legal procedures for disclosure of lobbying activities have been instituted only very recently in both the US and the UK. In the US, following the Abramoff scandal, in 2006, 2007 and 2009, legislation and executive orders were instituted to make contacts between lobbyists and government officials more transparent, and disclosures more frequent. In the UK, there are few legal restrictions on lobbying, and no mandatory disclosure by lobbying firms is currently required despite several recent ‘cash for influence’ scandals. Rather, lobbyists are self-regulated, with an industry body,